How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 3

This is Part Three, explaining how unions may attempt to win control of the construction and permanent jobs at the ancillary development around the arena. Part One explained the background of how construction trade unions have already obtained a monopoly on the construction workforce for the arena itself. Part Two explained the union plot to monopolize the service jobs at the arena.

Factions in the Construction Industry: Trusting Pragmatism Versus Principled Cynicism

Leaders of the Sacramento regional construction industry were on the sidelines as the new ownership of the Sacramento Kings basketball team privately negotiated a Project Labor Agreement with trade unions for construction of the new downtown arena. Yet construction business associations such as Associated General Contractors (AGC) and Associated Builders and Contractors (ABC) still supported the city’s plan for the arena.

In a pragmatic decision, these construction associations took the risk to trust that private developers for buildings near the arena will not require their contractors to sign Project Labor Agreements. This development will supposedly include 475,000 square feet of office, 350,000 square feet of retail and commercial space, up to 550 new residential units, and up to 250 hotel rooms, for a grand total of as much as 1.5 million square feet. Up to 11,000 jobs would result.

In exchange for acquiescing to the Project Labor Agreement on the arena, these associations expect fair and open competition for adjacent projects within the city’s Entertainment and Sports District. The Sacramento Bee reported this perspective expressed at a January 27, 2014 rally of contractors and union leaders in support of the arena:

John Cooper of Associated General Contractors said his group, which represents both union and nonunion builders, supports the arena project. “We see an opportunity for huge leaps and bounds when it comes…to job creation,” said Cooper, the AGC’s regional manager.

But Cooper said he’d “pull my support” if the ancillary development – a hotel, retail and more – isn’t open to all bidders. He said “I’ve been assured” there won’t be a project labor agreement covering this ancillary development, like there is for the arena itself.

Political consultant Chris Lehane, who is part of The4000’s leadership, said it’s “premature to ask those questions” about how the ancillary development would be built.

“Our focus right now is to make sure we get those 11,000 jobs,” Lehane said.

A handful of electrical contractors objected vehemently to this arrangement. They felt that allowing unions to have a monopoly on construction of the basketball arena would set a precedent for other major projects in the region. In addition, they did not trust union leaders or the politicians backed by union leaders to resist such a lucrative target once it was definite.

Dissenting from the major trade associations, these contractors individually provided enough campaign funding to revitalize a floundering signature-gathering campaign on petitions for a ballot measure for voters to establish a city charter provision requiring voter approval of a public subsidy for an entertainment or sports facility. Arena supporters feared – and arena opponents expected – that Sacramento voters would approve this check and balance against the proposed $258 million public subsidy for the basketball arena.

Enough signatures were collected to qualify the petition for the June 2014 ballot, but the city clerk disqualified the petitions because of numerous technical errors. The campaign then sued to overturn the city clerk’s decision, but a Sacramento County Superior Court judge agreed with the city clerk’s judgment and also ruled that the city charter could not be amended in this manner.

Can Unions Resist Grabbing More Work Through CEQA Greenmail?

Which of these two positions among bickering groups of contractors will be proven right? One possible indication of the future is an ultra-last-minute attempt by unions to amend a last-minute bill in the California State Legislature providing certain breaks to the arena and surrounding development from the California Environmental Quality Act (CEQA), the primary tool of unions to extort concessions from private developers. (This practice is known as “greenmail.”)

Late in the 2013 session, Senate President pro Tem Darrell Steinberg (D-Sacramento) amended Senate Bill 743 to make some minor modifications to the California Environmental Quality Act and “expedite judicial review of the entertainment and sports center project” for the Sacramento Kings basketball team. Despite some griping from Left and Right, SB 743 passed 56-15-7 in the Assembly and 32-5-2 in the Senate. This occurred early in the evening of the last day of the 2013 session.

As the midnight deadline for legislative action approached, Assembly Bill 852 mysteriously appeared on the Assembly floor, courtesy of Assemblyman Roger Dickinson (D-Sacramento). This bill supposedly made technical corrections to SB 743, passed earlier in the evening.

Reportedly a specific individual senior staffer for the Assembly Republican Caucus became suspicious of the bill and investigated it. This staffer realized that it was some sort of union scheme to remove the CEQA breaks for development around the downtown Sacramento arena.

The Sacramento Bee described what happened next:

In a final flare of end-of-session drama, Assembly Republicans led the defeat of a last-minute labor-inspired cleanup bill related to legislation passed earlier in the evening to hasten the building of a new arena in downtown Sacramento.

Assembly Bill 852 surfaced late on Thursday evening, after both houses had passed Sen. Darrell Steinberg’s SB 743 to streamline the construction of a new arena for the Sacramento Kings. AB 852 was cast as a minor cleanup bill, making just a small change to the arena bill by further restricting which projects could be exempted from some environmental review.

It was requested by labor unions, Steinberg said, who feared that other businesses would get in on the streamlined environmental review procedures intended for the arena.”The concern from labor was that Wal Mart and the big box stores could potentially take advantage of that part of (SB) 743 to get an exemption,” he said.

The 2013 legislative session wrapped up in anger and partisan rancor as the Assembly Republican leadership refused to support AB 852 and accused the Democrats of trickiness. The bill only received 28 votes in the Assembly, and the legislature adjourned for the year with SB 743 intact.

Of course, there was no plan for a Wal-Mart next to the Kings arena. But the distaste of the Left for Wal-Mart provided a politically-potent rationale to “fix” SB 743. An article in Salon provided a perspective on SB 743 otherwise neglected by the news media:

Along with special exceptions for a new stadium for Sacramento’s basketball team, the new law restricts some grounds for CEQA lawsuits. “It’s going to give much more leeway to big companies to just come in and ram these projects through,” said James Araby, who directs the Western States Council of the United Food & Commercial Workers union…

The UFCW and Wal-Mart – and allies on both sides – faced off with particular fury not long before the final SB 743 vote, as legislators considered language labor argued was needed to stop the bill from becoming a loophole for unchecked Wal-Mart expansion…

[Assemblymember Lorena] Gonzalez, a former labor council secretary-treasurer, told Salon that in fights with Wal-Mart, “one of the only tools we’ve been able to use is CEQA, and specifically the traffic impact of Wal-Mart.” Following what she called “massive lobbying by the Chamber of Commerce” and “mainly by Wal-Mart,” the labor-backed amendment failed.

An official with the union-aligned Planning and Conservation League acknowledged in the article that “We all know that Wal-Mart is one of the biggest targets of CEQA lawsuits.”

Is it likely that the amendments backed by the United Food & Commercial Workers union will reappear at the last minute in a budget trailer bill or some other gut-and-amend bill in 2014? Of course it is, and every union will benefit from ending the CEQA break.

More evidence that unions will use environmental laws to target the ancillary development around the Kings arena comes from comments submitted to the City of Sacramento concerning the Draft Environmental Impact Report for the Entertainment and Sports District. As noted in Part 2, the UNITE HERE Local Union No. 49 submitted objections to the report along with remarks about wanting to retain and represent service workers at the new arena.

In addition, a group called Sacramento Coalition for Shared Prosperity submitted objections in conjunction with a demand for a “Community Benefits Agreement” that developers must sign for ancillary development. That agreement, modeled on the L.A. Live Community Benefits Agreement for development around the Staples Center, could guarantee “union jobs” for hotels, restaurants, janitors, parking attendants, and construction trade workers, among various occupations.

Perhaps the biggest threat to the downtown arena is the possibility that SB 743 is unconstitutional and that the arena doesn’t even qualify under the criteria in SB 743. If a court agreed with either of these claims, the environmental review would probably need to start from the beginning.

How will the Sacramento Kings basketball team ownership and the City of Sacramento respond to these costly union demands, packaged with the grounds for potential environmental lawsuits? If unions exploit the weakness of SB 743, they may get the whole package – provided the resulting cost increase allows the Entertainment and Sports District to get built in the first place.

The Three-Part Series: How a Basketball Arena Would Expand the Unionized Workforce in Sacramento

1. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 1

(how construction trade unions have already obtained a monopoly on the construction workforce for the arena)

2. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 2

(how unions are likely to win representation of the food and service workers at the new downtown Sacramento arena)

3. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 3

(how unions will likely target the ancillary development around the arena)


Union Leaders and Building Contractors Rally in Support of ArenaSacramento Bee – March 11, 2014

UNITE HERE Local 49 comments on Draft Environmental Impact Report

Sacramento Coalition for Shared Prosperity comments on Draft Environmental Impact Report

California Senate Bill 743

California Assembly Bill 852

Legislature Rejects Late Night Attempt to Tweak Kings Arena BillSacramento Bee – September 12, 2013

Very Sneaky, Walmart: How The Mega-Retailer Rolled Back California RegulationsSalon – October 14, 2013

Regional Sports and Entertainment Facilities in the Urban Core Attract Costly Political Meddling: Sacramento Kings as a Case – December 16, 2013


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at Follow him on Twitter at @DaytonPubPolicy.




California Legislator Proposes “Public Employee Bill of Rights”

The average state or local government worker in California makes nearly $70,000 per year (ref. U.S. Census 2010 State Payroll – California and U.S. Census 2010 Local Government Worker Payroll – California). The average state or local government worker in California, if they work 30 years, will retire with a pension that averages $66,864 per year, and the average public school teacher in California, if they work 30 years, will retire with a pension that averages $68,316 per year (ref. CalPERS Annual Financial Report FYE 6-30-2011, page 153, and CalSTRS Annual Financial Report FYE 6-30-2010, page 149). Bearing in mind that most private sector workers spend at least 40 years performing full-time work – for example, from age 25 until age 65 – it is germane to note that a public school teacher in California who works 40 years will receive an average retirement pension of $103,128 per year.

In addition to pay and retirement benefits that greatly exceed private sector averages, California’s state and local workers are invariably granted health insurance benefits where the vast majority of the premium payments are covered by the employer.  In the private sector, it is a privilege to be offered membership in a group plan, i.e., to even be allowed to have health insurance, much less have 80% (or more) of the premium covered by the employer.

The typical state or local government job in California usually includes 12-14 paid holidays per year, along with paid “personal” days, paid vacation that levels off at 20 days (or more) per year by mid-career, sick leave that accrues without limit and can be cashed in, and “comp time” packages such as the “9/80” program, whereby if a government employee works nine hour days for nine days, they get the 10th day off with pay. That is, show up slightly early and skip a few breaks each day, and you get a three day weekend every other week, with pay.

Let’s not forget that on top of these benefits that only “millionaires and billionaires” can enjoy in the private sector, the average public sector worker pretty much has a job for life. In a mere two years, for example, a public school teacher acquires “tenure,” and cannot be fired without a due process that is obscenely expensive and outrageously prolonged – even if they have committed serious crimes. Similar protections exist for most all government workers in California.

But it isn’t enough.

As reported on February 13th in the Sacramento Bee, in an article entitled “California lawmaker writes ‘Public Employees Bill of Rights’,” Assemblyman Roger Dickinson, D-Sacramento, has introduced legislation that would “give unionized state workers more workplace discipline protections and first dibs on state government work.” And as one might expect, SEIU Local 1000 and the Union of American Physicians and Dentists support Dickinson’s AB 1655, the “Public Employees Bill of Rights Act.”

Anyone familiar with public employee labor organizations or has read through any of the labor agreements negotiated for state and local government employees by these unions knows that California’s government workers are already among the most over-protected, over-paid workers in the history of the planet.

Ultimately, the problem with even more rules that bankrupt our governments at the same time as they restrict the ability of public managers to run their agencies efficiently are not the fault of the workers. Who doesn’t want to be a millionaire? The root of the problem is the agenda of public sector unions, which is invariably to increase their membership and negotiate ever higher compensation packages, which translates into more dues revenue for these unions. The inevitable result of this agenda is more government programs, more government spending, higher taxes, and budget deficits. The inherent agenda of public sector unions is at odds with good governance and the public interest.

One of the most astute commentators on the issue of public sector sustainability is David Goldman, a relatively obscure columnist for the Asia Times who has, for years, offered seminal insights on politics, economics and demographics. Goldman pours cold water on the notion that those who call for reform of the public sector unions are being manipulated by corporations and billionaires. In a post last fall entitled “The Economics of Polarization,” he writes:

“America is engaged in class war, but not of the sort one reads about in the mainstream press. The truly indigent have little to do in this war. Large corporations for the most part are bystanders as well; they will make their peace with the victor. This is a war of survival between the productive middle class on one hand, and the dependents of the state on the other.”

“Public sector employees unions rode the real estate bubble along with homeowners, and local governments awarded them unsustainable concessions in the form of pay, pensions and health benefits. Their political power waxed with state and local spending power. Today the public sector unions are the backbone of the Democratic Party. They man the phone banks, staff polling stations, and round up voters to the polls.”

One may consider it partisanship to quote a pundit who identifies the Democratic party as in partnership with public sector unions. Or perhaps it would merely be accurate reporting. Assemblymember Dickinson and all of those in his position – Republicans among them – need to decide what is truly in the public interest. Taking money from public sector unions whose sole agenda is the expansion of government, while corporations sit on the sidelines, represents a profound political imbalance that cannot endure.